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Report flags significant lack of insurance protection among families

24 April 2017

Parents are more likely to insure their possessions than their health despite over 40% saying they are concerned that they or a member of their family could develop a serious illness and 45% of parents with dependent children could not support their lifestyle for a month if the main breadwinner was unable to work, according to a survey by Aviva.

Nearly half of parents with dependent children1 are concerned about developing a serious illness but are still more likely to buy protection for bricks and mortar, phones and pets than insure their family against a loss of income due to their ill health, according to research from Aviva.

The insurer’s Protecting our Families report reveals nearly half (43%) of UK parents are concerned that they or a member of their family could develop a serious illness or condition, making this their second greatest fear after the rising cost of daily necessities (45%).

Despite this fear, the report found that three quarters (76%) of parents have no financial plan in place for dealing with a lost income due to ill health and 68% have no plan for dealing with the death of either themselves or their partner.

Results of the survey revealed that parents are much more likely to insure the family pet (24%), mobile phone (23%) or the contents of their home (75%) or building (65%) than have private health insurance/dental cover (22%) or protection for ill health, such as critical illness cover (18%) and income protection cover (13%). Uptake of life insurance amongst parents was found to be 46%.

Nearly half (45%) of UK families with dependent children1 could only survive financially for less than a month, without making any changes to their current lifestyle, before their savings ran out if the main breadwinner was unable to work due to serious illness or death.

More than one in four UK families (27%) say they have actually dealt with the reality of a loss of income due to ill health, serious illness or the death of a long-term partner, with the experience leaving one in five (20%) thinking they will never recover financially again, or have no idea how long it will take.

The survey found that many families would be ill-equipped to cope with a health crisis due to a lack of planning and available funds. 18% of parents with dependent children say they could not reduce their monthly spending at all and nearly one in four families (24%) have no savings to fall back on whatsoever.

Paul Brencher, managing director, Individual Protection, Aviva UK said: “With the pressures of modern living it’s very easy for parents to get side-tracked into only dealing with immediate challenges and problems, such as putting food on the table, and protecting material possessions. While these are all important, it is also essential that parents consider the long-term impact for their family if they were to fall seriously ill.

“We want to encourage parents, particularly those with dependent children, to consider how they would protect their family if the worst happened. This means considering all of their financial assets and commitments and ensuring they have put the necessary plans and protection in place, just in case they do face this situation at some point in their lives. Making small financial sacrifices now could ensure they are financially resilient for the future.”

The Protecting Our Familiesreportstudy was designed by Aviva in collaboration with ICM Unlimited and Instinctif Partners, carried out independently by ICM during Q4 2016 among a representative sample of 2,500 UK adults, of which 1,593 were parents with dependent children including 435 who have experienced loss of income due to ill health, serious illness or death within the family.

1Families with dependent children are classed in this release as those with children (aged under 18 or 18 and above but mostly financially dependent on their parents), including two-parent families who are married or cohabiting along with divorced, separated or widowed parents.

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